THE YEAR IN BUSINESS: 1991

THE YEAR IN BUSINESS: 1991; Russell L. Ray: An Era Ends In Aviation

By AGIS SALPUKAS

Published: December 30, 1991

Shortly after Russell L. Ray Jr. took over as president and chief executive of Pan American World Airways in September he acknowledged that reshaping the carrier into a smaller airline whose flights were mostly to Latin America would be a daunting task.

Yet the executive rolled up his sleeves and began to hold a series of huddles with Delta executives, who offered assistance; labor union leaders, and creditors, who began to offer some support.

But there were two key groups of people who did not pledge support: travel agents, who began to book away from Pan Am, and travelers, many of whom turned to other airlines.

And if that were not enough, the Delta executives later decided they had thrown enough money into the bleeding carrier and Pan Am was forced to shut down Dec. 4, putting 10,000 people out of work.

It was a tumultuous year for Pan Am. In January, its parent company, the Pan Am Corporation filed for Chapter 11 bankruptcy protection. In July, Pan Am agreed to sell its European routes, planes, Frankfurt operations and the shuttle to Delta. That was the beginning of the end.

By the time Mr. Ray assumed control of the carrier little could be done to save it. And while he and most of the staff in New York had moved to a hangar at Miami International Airport to plan a new carrier. Instead they ended up organizing an orderly shutdown.

Pan Am, which was founded in 1927, was the third big United States airlines to stop flying in 1991. Eastern Airlines ceased flying in January and Midway Airlines closed in November.